Eli Lilly (LLY 1.19%) and Merck (MRK 0.37%) are both among the largest biopharmaceutical businesses in the world, but their growth prospects aren't exactly the same. Nonetheless, the pair handily outperformed the market over the last 12 months, with Eli Lilly's total return rising by 73%, and Merck's climbing by 25%. But only one of them is likely to have a shot at outperforming over the next few years.

Let's explore which of the pair is the better pharma growth stock, so that you can see whether one or both could be a beneficial pickup for your portfolio.

Mounjaro should be a big winner for Eli Lilly

The case for Eli Lilly being the better pharma growth stock rests on the medications that it's planning to commercialize within the next year or so, as well as on the continued expansion of one of its freshly launched high-earning drugs.

Eli Lilly's bottom line for 2022 was more than $6 billion, practically the same as the amount it made in 2020. But don't let that trick you into thinking it won't be adding more earnings. It expects to grow its earnings per share (EPS) from $6.90 last year to at least $9.20 this year, for a gain of 33%. Wall Street analysts estimate that in 2024 it'll report another huge jump, to $12.50 per share.

Four of its programs are currently in regulatory review, awaiting a verdict from the Food and Drug Administration (FDA). The star of the show will be the additional indication it's seeking for Mounjaro, which was approved early last year to treat diabetes.

If the company succeeds in getting regulators to agree that the drug is also useful to treat weight gain, the $980 million in sales it made in the second quarter will look like peanuts in short order. And that's not even counting the potential beneficial impacts if it's approved to treat cardiovascular risks, sleep apnea, and heart failure.

Eli Lilly also has two other phase 3 programs for obesity, not to mention its therapy for Alzheimer's disease, which is under review. In total, investors are likely in for a treat.

Keytruda marches onward for Merck

Merck's cash cow is its cancer therapy Keytruda, which is also its best hope for growth for the moment. In the second quarter, sales of Keytruda were above $6 billion, 19% higher than a year prior.

Merck is looking to expand the cancers that are eligible for treatment with this therapy, and right now regulators are considering a whopping total of seven additional oncology indications. The company is also doing another five phase 3 clinical trials for even more expanded indications in cancer.

It's almost a certainty that Keytruda sales will keep climbing for years to come. And there are more than a dozen other oncology programs in late-stage clinical trials as well.

The catch is that one highly successful drug might not be enough to make the company grow faster than Eli Lilly. Over the last three years, Merck's trailing-12-month net income fell by 73%, to around $3 billion. A significant part of the reason for that drop is that it just acquired Prometheus Biosciences for around $10 billion.

Without that purchase, it could have reported EPS of around $7, based on management's guidance and its stated cost per share of the acquisition. Next year, Wall Street analysts are predicting that Merck will have EPS of $8.50, which implies base earnings growth of 21% when excluding the costs of the acquisition.

So Merck isn't expected to be adding to its earnings as rapidly as Eli Lilly. That makes Eli Lilly the better growth stock for the near term. But in truth, it's hard to go wrong with buying shares of either of these businesses. And since their big growth candidates aren't likely to be in direct competition, it might even make sense to buy stock in both.